By Ahmad Hathout
Rogers CEO Tony Staffieri said Wednesday that the company expects to see increased wireless subscriber movement between carriers throughout the year in part due to heightened competition and ease of switching.
The cable giant saw its rate of postpaid customer defections for the first quarter of the year increase to 1.1 per cent compared to the 0.79 per cent it logged in the same quarter last year.
Staffieri said part of this came from the competitive offers from other carriers that seeped from the holiday season into the new year. Quebecor’s Freedom, for example, has been pushing and holding low-cost promotional offers that have reduced its monthly average revenue per user (ARPU) to $36 — far below its competitors in its fourth quarter report.
And the trend, Staffieri said of churn, is expected to continue.
“As we look through the rest of the year, we continue to see factors that would suggest heightened churn,” Staffieri said. “Just the way the new-to-Canada segment works in terms of coming in, coming out — that’s a factor that’s going to be bit of a permanent input to increased churn.”
Staffieri also said innovations, like the eSIM, which allows customers to forgo putting a physical card in their phone to get service, will facilitate that switching.
“But it isn’t something that we’re necessarily concerned about,” Staffieri said about the increased churn rate. “It’s really a demonstration of the competitiveness in the market. And as customers…have choices, we do well in that environment. So we continue to look at it on a net basis and ensure that the…acquisition costs continue to come down, so that even in a higher churn environment, we have a very balanced approach to deliver industry-leading margins on the wireless portfolio.”
Staffieri said that balanced approach includes aggressively competing on the lower-cost flanker segment, but also maintaining a focus on bringing customers onto the premium Rogers brand and have them move up from 4G to 5G at the $50 entry point.
“That’s been a real catalyst for ARPU growth overall in our portfolio,” Staffieri said.
The carrier added 98,000 net new postpaid wireless subscribers, more than the 95,000 in the same quarter last year, for a total base by quarter-end to 10.5 million.
On prepaid, the company lost 37,000 customers compared to the 8,000 it lost compared to the equivalent period. The total base on the prepaid segment shrunk by nearly 230,000 over the year to just slightly over 1 million subscribers. Churn in this segment, however, was down in the quarter to 3.9 per cent compared to last year’s nearly 6 per cent.
Monthly wireless ARPU was $58, up nearly a dollar from the same period last year.
Wireless revenues were $2.5 billion, up from the $2.3 billion in the same quarter last year.
Rogers executives also touted as “terrific” the take-up of its new fixed-wireless product, which the carrier is driving into the one-third of its footprint where it doesn’t have wired infrastructure.
“It really speaks to the quality of the product itself in terms of how it performs for home internet, including video streaming,” Staffieri said. “But secondarily, the ease of buying and setting up the product is something that is really resonating with consumers,” including the new-to-Canada segment, he added.
Rogers purchased internet wholesaler Comwave in the fourth quarter last year to facilitate the bundle strategy that has been all the rage lately.
After the release of its first quarter earnings report Wednesday, Rogers announced it has signed a 10-year agreement with global media and technology company Comcast to bring the latest Xfinity broadband, smart home and connectivity products and technology to Canadians across the country, starting later this year.
A new device powered by Entertainment OS, Comcast’s next generation of connectivity, will soon be available to Rogers customers as well as an expanded suite of home security products and features developed by Comcast and Xfinity.
Rogers said the Entertainment OS platform will simplify the viewing experience by bringing live sports, entertainment and news, on-demand and streaming apps into one platform, “so customers spend more time watching and less time searching with the award-winning voice remote and integrated interface,” a Rogers press release said.
Also through this agreement, Rogers will offer its customers the latest gateways developed by Comcast, enabling users to experience 10G technologies including multi-gigabit speeds, ultra-low lag and even better reliability, the release said. “This will deliver a truly converged and seamless experience between WiFi and wireless and between devices and apps,” it said.
Cable revenues were up from $1 billion to $1.96 billion over the year. Since the acquisition of Shaw, the company has far more homes passed by cable, at just about 10 million compared to the nearly 5 million it had in the same period last year.
It added 26,000 net new internet subscribers in the quarter, up 12,000 from last year. The total internet base by quarter-end was nearly 4.2 million compared to 2.3 million last year.
The cable giant lost 27,000 video subscribers in the quarter, 19,000 more than it lost last year. The total video subscriber base, however, was higher by about 1.2 million to 2.7 million by quarter-end.
The landline segment lost 35,000 subscribers in the quarter, 22,000 more than it lost in the same period last year. The base was still 771,000 higher for a total of roughly 1.6 million.
Earlier this month, the cable company expanded its Self Protect home security product into western Canada. It suffered fewer net losses in the smart home monitoring segment for the quarter, losing 1,000 customers, 4,000 less than the same period last year. The total subscriber base shrunk by 8,000 to 88,000.
Media revenues were down 5 per cent from $505 million to $479 million, attributed in part to lower subscriber revenue.
In total, revenues were $4.9 billion in the quarter, more than the $3.8 billion it made in the same quarter last year. Net income was down to $256 million compared to the $511 million it made in the same period last year.
The cable giant blamed the income dip on higher depreciation and amortization costs related to its acquisition of Shaw and higher finance costs.
Screenshot of Rogers CEO Tony Staffieri
